Middleton Doll aims to go private: Ailing Waukesha firm hopes to buy out stockholders
Sep 30, 2008 (Milwaukee Journal Sentinel - McClatchy-Tribune Information Services via COMTEX) -- After years of financial struggles, Middleton Doll Co. of Waukesha said Monday that it wants to become a private company.
The de-listing proposal includes a 1,000-to-one reverse split of its common stock and a payout of 50 cents per share to holders of fewer than 1,000 shares of common stock. Before the announcement, Middleton shares closed unchanged at 23 cents per share in over-the-counter trading.
Middleton's two divisions, Lee Middleton Original Dolls and Licensed Products, make dolls and clocks. The company started as Bando-McGlocklin, a real estate investment trust, making loans to small businesses and owning commercial real estate. Middleton phased out its financial services segment after running into financial problems a few years ago.
Middleton had an obligation to redeem its preferred shares at $25 per share in July, but did not have sufficient funds to do that. The plan to go private includes a proposal to reduce the $25 per share obligation for preferred share redemption to $18, and to extend the maturity date to July 1, 2010.
The company reported a consolidated net loss of $1.5 million or 40 cents per diluted share for the first half of 2008, compared with a net loss of $1.6 million or 42 cents per diluted share for the same period in 2007.
In its announcement Monday, the company said it had received a fairness opinion on the value of its common shares from Donnelly Penman & Partners. The company also said it would save money by going private and eliminating expenses for reports to the Securities and Exchange Commission.
If Middleton has fewer than 300 shareholders of record after completing the reverse split transaction, the company intends to terminate the registration of its common stock, and its preferred stock, of which there are now fewer than 300 shareholders of record. Middleton would then become a private company.
The company's proposal will need the approval of shareholders at a meeting to be held by early December.
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